General Motors finished 2024 strong. It beat analysts’ estimates for nearly every metric they examine. So why is the Detroit-based automaker watching its stock slide nearly 10% in the wake of all that positive news? Ignoring the obvious.
General Motors Chair and CEO Mary Barra said the company enjoyed strong results for 2024.
The company reported full-year 2024 net income attributable to shareholders of $6.0 billion and EBIT-adjusted of $14.9 billion. Fourth-quarter 2024 net income attributable to shareholders was a loss of $3 billion and EBIT-adjusted was $2.5 billion.
Fourth quarter net income was reduced by more than $5 billion in special charges driven primarily by $4 billion of non-cash restructuring charges and impairment of our interests in certain China Joint Ventures, and $0.5 billion in charges related to the decision to stop funding the Cruise robotaxi business.
Despite this good news, GM’s stock dropped after the results were released, and slid further after the company’s top executives, Chair and CEO Mary Barra and CFO Paul Jacobson, spoke on the earnings call and conducted interviews with different media outlets. The stock fell more than 10% at one point during the day but has rebounded slightly to hover around a 9% decline in afternoon trading.
What happened?
Concerns about potential Trump tariffs and other policies that could drive up vehicle prices are impacting the company’s stock.
Analysts and investors appear concerned about GM not accounting for the potential impact of Trump administration policies in its rosy outlook for 2025.
“GM’s 2025 financial guidance assumes a stable policy environment in North America,” the company wrote in a note to shareholders. However, according to several analysts and other reports, GM didn’t figure the potential impact of the loss of the $7,500 tax credits for buying qualified electric vehicles as well as the looming threat of tariffs on Canada, Mexico and others.
“We’re encouraged that President Sheinbaum of Mexico has indicated that they are working and having conversations to take the steps necessary that the Trump administration is looking for specifically around immigration and some other things to avoid the tariffs, but we’re doing the planning and have several levers that we can pull,” Barra said during the call.
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Outlook for 2025
The company anticipates adjusted EBIT of $13.7 billion to $15.7 billion and net income attributable to shareholders of $11.2 billion to $12.5 billion. The direction is for adjusted automotive free cash flow of $11 billion to $13 billion, automotive operational cash flow of $21 billion to $24 billion
Additionally, the company estimated a benefit of $0.5 billion from reduced year-over-year expenses at Cruise. The financial guidance also includes anticipated capital spending of $10 billion to $11 billion, inclusive of investments in the company’s battery cell manufacturing joint ventures, the company told shareholders.
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